Gibson Dunn Webcast: New Congress and New Administration
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New Congress and New Administration: A Different Legislative and Policy Landscape for Companies January 22, 2021 Agenda 1. Congressional Landscape 2. Administration’s New Landscape 3. Financial Services 4. Antitrust 5. Consumer Protection/Privacy 6. Questions 2 LAY OF THE LAND IN THE 117TH CONGRESS (SENATE) Health, Education, Commerce, Science Homeland Security Armed Services & Gov. Affairs Labor & Pensions & Transportation Gary Peters Rob Portman Patty Murray Richard Burr Jack Reed Jim Inhofe Maria Cantwell Roger Wicker (D-MI) (R-OH) (D-WA) (R-NC) (D-RI) (R-OK) (D-WA) (R-MS) Judiciary Finance Banking, Housing & Urban Affairs Aging Dick Durbin Charles Grassley Ron Wyden Mike Crapo Sherrod Brown Pat Toomey Bob Casey Tim Scott (D-IL) (R-IA) (D-OR) (R-ID) (D-OH) (R-PA) (D-PA) (R-SC) Agriculture Appropriations Budget Foreign Affairs Debbie Stabenow John Boozman Patrick Leahy Richard Shelby Bernie Sanders Lindsay Graham Bob Menendez James Risch (D-MI) (R-AR) (D-VT) (R-AL) (I-VT) (R-SC) (D-NJ) (R-ID) 3 PRIVILEGED AND CONFIDENTIAL – ATTORNEY WORK PRODUCT LAY OF THE LAND IN THE 117TH CONGRESS (HOUSE) Labor & Education Transportation Appropriations Energy & Commerce Financial Services Bobby Scott Virginia Foxx Peter DeFazio Sam Graves Rosa DeLaura Kay Granger Frank Pallone Cathy Maxine Waters Patrick McHenry (D-VA) (R-NC) (D-OR) (R-MO) (D-CT) (R-TX) (D-NJ) McMorris (D-CA) (R-NC) Rodgers (R-WA) Oversight & Science, Space Government Reform Homeland Security Judiciary Ways & Means & Technology Carolyn James Comer Bennie Mike Rogers Jerrold Jim Jordan Richard Neal Kevin Brady Eddie Bernice Frank Lucas Maloney (R-KY) Thompson (R-AL) Nadler (R-OH) (D-MA) (R-TX) Johnson (R-OK) (D-NY) (D-MS) (D-NY) (D-TX) 4 PRIVILEGED AND CONFIDENTIAL – ATTORNEY WORK PRODUCT The Senate Confirmation Process • Nominees are subject to lengthy questionnaires from the Senate Committee in charge of their nomination as well as FBI background checks. • Nominees must also clear any ethical concerns related to financial entanglements – a lengthy financial disclosure report is required to be filed with the Office of Government Ethics detailing all assets, liabilities, and sources of income. • Only one nomination hearing (DoD) is scheduled before President-elect Biden is sworn in, the rest will likely occur towards the end of January and early February. • With Democrats now gaining Senate Majority (and chairmanships of committees overseeing nominations), few, if any, roadblocks are expected. Due to recent rule changes, filibusters can now be broken with a simple majority vote, thus Republicans are unlikely to block any nominees unless they can peel off some Democrats. 5 Key Appointments: Ron Klain, White House Chief of Staff • Background . Served as White House Ebola Response Coordinator . Served as Biden’s first chief of staff when he became Vice President . Served as chief of staff for Vice President Al Gore . Served as associate counsel to President Bill Clinton in charge of judicial selection . Worked at Revolution LLC and was a partner at O’Melveny & Myers Major Pillars of the Biden Administration Agenda . Climate Change . Economic Relief . Pandemic Relief . Racial Justice These themes will carry across various agencies of the incoming administration and the individuals chosen to lead and shape those agendas. 6 Key Appointments: Merrick Garland, Attorney General Background • Currently serves on the United States Court of Appeals for the District of Columbia, where he was Chief Judge for seven years • Veteran of the Department of Justice and served as Deputy Assistant Attorney General for the Criminal Division and Principal Associate Deputy Attorney General • Investigated and tried cases involving public corruption, drug trafficking, and fraud. Likely Priorities • Restore public confidence in DOJ as non-partisan and non-political • Likely to revert to the Obama-era DOJ approach of aggressive enforcement of the financial sector, including holding executives, not just corporations, responsible for wrongdoing. • Expected to beef up Civil Rights Division and aggressively investigate suspected instances of police brutality 7 Key Economic Appointments: Janet Yellin, Treasury Secretary Background • Served as the Chair of the Federal Reserve from 2014 to 2018, and as Vice Chair from 2010 to 2014 • Previously, served as President and Chief Executive Officer of the Federal Reserve Bank of San Francisco; Chair of the White House Council of Economic Advisers under President Bill Clinton; Federal Reserve Board Governor; and business professor at the University of California, Berkeley, Haas School of Business. Likely Priorities • Replenish the Treasury’s ranks, including the Domestic Finance division. • Front and center on any further government stimulus packages • May get tougher on banks: last action as Fed Chief was crackdown on Wells Fargo 8 Key Economic Appointments: Mayor Marty Walsh, Department of Labor Secretary Background •Currently the Mayor of Boston, Walsh’s nomination enjoyed wide support from major unions such the AFL-CIO’s two largest affiliates the AFT and the American Federation of State, County and Municipal Employees. •Prior to becoming Mayor, Walsh was a state representative and head of the Boston Building Trades Council, a union group. •Has a close personal friendship with President-elect Biden, who spoke at Mayor Walsh’s 2017 inauguration. If confirmed, Mayor Walsh will be the first labor union member to serve in the role in half century. Likely Priorities • The immediate focus will be providing support to the millions of unemployed Americans. • Expect a robust repeal and replace regulatory agenda and increased enforcement of laws governing the relationship between business and labor. 9 Key Economic Appointments: Gov. Gina Raimondo, Commerce Secretary Background . Currently the governor of Rhode Island, she has served in that position since 2015. Previously served as General Treasurer of Rhode Island. Prior to entering government, Governor Raimondo worked at a venture capital fund backed by Bain Capital before starting her own investment fund, Point Judith Capital. Likely Priorities . Expected to focus heavily on relationship and competition with China. Encouraging trade that emphasizes protecting the environment and combatting climate change . Post-COVID-19 pandemic economic recovery 10 Other Top Agencies To Watch • Health and Human Services – Xavier Becerra . COVID-19 response and vaccine distribution . Protecting and expanding the Affordable Care Act, which may include additional regulation of healthcare industry . Reproductive rights and women’s access to healthcare • U.S. Trade Representative – Katherine Tai . Expected to advance policies more closely aligned with free trade . Will play a key role in any deal to rejoin TPP, which Biden has pledged to renegotiate. • Chair, Securities and Exchange Commission . In the running: Former SDNY U.S. Attorney Preet Bharara, former CFTC chief Gary Gensler • Director, Consumer Financial Protection Bureau . In the running: FTC commissioner Rohit Chopra, Rep. Katie Porter (D-CA), CFPB fair lending director Patrice Ficklin 11 Key Issue: Financial Services Landscape: President-elect Biden and congressional Democrats have pledged to increase financial regulation, consider banking-related legislation, and bring more enforcement actions against the financial services industry. Congress: Now that Democrats control the senate, expect discussion of the following issues: . Updated Glass-Steagall: Biden-Sanders Task Force plan calls for expanding separation between retail banking institutions and investment banking. The 2020 Democratic Party Platform expressly supported “an updated and modernized version of Glass-Steagall.” . Strengthening Dodd-Frank: Biden-Sanders plan calls for strengthening Dodd-Frank Act, particularly on consumer lending, including credit cards. Unclear whether Biden Administration will do so through legislation or regulatory action. Financial Access to Underserved Communities: Democrats will likely focus on legislation that ensures banks and financial institutions offer services to help low-income communities and demographics traditionally underserved by the industry. This may include creating a Public Credit Reporting Agency within the Consumer Financial Protection Board to provide borrowers with a government option in lending. Relieving Student Loan Debt: Proposals include forgiveness of up to $10,000 of student debt per borrower; pauses in monthly payments and interest accruals. 12 Key Issue: Financial Services Executive Branch: The Biden campaign did not prioritize financial services issues, so his policy remains uncertain. Even so, the Executive branch of the Biden Administration will likely focus on the following areas. Volcker Rule: Under the Trump Administration, Volcker Rule was changed. Democratic Platform calls for strengthening the Volcker Rule. Enhanced Regulation: Biden Administration is likely to roll back deregulatory efforts of Trump Administration and enhance financial regulation. Strengthened Capital Requirements: Biden Administration may focus on tightening leverage requirements for banks and financial institutions. • Enforcement and Oversight: . Biden Administration will likely bring additional enforcement actions against financial services companies, advisors, and investors as well as seek harsher penalties. Biden-Sanders Task Force Recommendations call for criminal penalties under Dodd-Frank as well as holding financial institutions accountable for discriminatory lending practices